Stablecoin liquidity surge highlights proximity of new Bitcoin rally
The cryptocurrency market is always looking for signals that may indicate the next moves of the Bitcoin , and one indicator that has been gaining prominence is stablecoin liquidity. Historical data reveals a correlation between rising stablecoin liquidity and sustained gains in the cryptocurrency market, suggesting that Bitcoin’s next rally may be approaching.
A recent report from CryptoQuant highlighted that the liquidity drive for Tether (USDT) and USD Coin (USDC) has started a process of expansion again, with USDC seeing unprecedented growth in the span of a year. This increase in liquidity is an encouraging sign for investors as it suggests that more capital is flowing into the cryptocurrency market.
According to the data , the total market value of stablecoins in US dollars has surpassed the $200 billion mark, reaching an all-time high of $204 billion. This milestone was recently broken, highlighting the growing interest and adoption of stablecoins as an important tool in the cryptocurrency market.
“Liquidity conditions in crypto markets, as measured by the total value of stablecoins in circulation, have seen a boost since the U.S. presidential election. The expansion in liquidity is typically associated with sustained gains in crypto markets and is often followed by a surge in prices,” he noted. “The total market capitalization of stablecoins has surpassed the $200 billion mark. The total value of USD-denominated stablecoins reached $200 billion last week and is now at a record $204 billion.”
USDT remains the main asset driving the expansion of stablecoin liquidity, with a market cap of $139,4 billion, following a 15% increase since the beginning of November. However, USDC has also gained significant traction, with a 48% increase in its market cap over the same period, reaching $53,3 billion.
“Historically, whenever liquidity momentum is growing, a rally in cryptocurrency prices follows… Further acceleration typically pushes cryptocurrency prices higher,” the analytics platform explained. “The total value of stablecoins is an important source of liquidity for exchange trading, and its expansion is usually associated with higher cryptocurrency prices,” it added.
In summary, the expansion of stablecoin liquidity, the increase in exchange deposits, and the historical correlation with crypto rallies suggest that Bitcoin may be preparing for a new bull cycle. Investors should pay attention to these signs and consider the potential for Bitcoin to increase in value in the coming months and a new rally for the largest cryptocurrency.
At the time of publication, the price of Bitcoin was quoted at US$102.231, down 2.3% in the last 24 hours.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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